Rael Levitt is apparently readying himself to expose widespread corruption across the auctioneering industry in an attempt to save himself, but there’s still little word on exactly where he is. All the while, other skeletons seem to be freely emerging from the cupboard too.

The Auction Alliance website experienced some lengthy downtime over the weekend, and it would appear they are still advertising, but for how long it remains unclear.

There’s little doubt that the intensified media coverage has revealed some worrying accusations against Auction Alliance, but some accounts emerging from the public have been equally as worrying.

Over the course of last week, since bringing you the disturbing account from inside the AA juggernaut, 2oceansVibe and other media have been receiving reports about illegal ghost bidding taking place at Auction Alliance auctions.

Ghost bidding, or vendor bidding as the industry likes to call it, is not outwardly illegal.

Barry Washkansky, of Summit Listings, spoke to Rael when he was still CEO:

Some argue that ghost bidding is fraudulent and illegal but when it comes to the auctioneer bidding on behalf of the seller the law is not 100% clear. When attending an auction it’s vital to read the conditions of sale by which the auction process is governed. The Alliance Group has a paragraph in its conditions of sale that reads: “Only the Auctioneer or his agent shall be entitled to bid up to the reserve price on behalf of the seller but shall not be entitled to make a bid equal to or exceeding the reserve price.” This paragraph seems to allow for bidding by the auctioneer (at least up to the reserve price) but whether they have an obligation to disclose this is not clear. Not all companies include this paragraph in their conditions.

Rael Levitt, CEO of the Alliance Group provided some clarity on the clause. He said: “Ghost bidding and planted bidders are illegal. With regards to the (above) clause, there are several types of auctions where the sellers’ interests need protecting. We largely use the clause for insolvency, sales in execution and bank sales where the bank has to protect its financial interest in the bidding process. Banks and creditors regularly attend auctions and bid and we use the clause to protect their interests. It does not allow for any illegal activity.”

To be legal, it must happen at auctions where there is no reserve price, and when the vendor bidder is identified to the other bidders present.

Essentially, the vendor bidder has no intention of buying the property, and they simply bid against other legitimate bidders and push the price higher.

Where a ghost bidder is concerned, the other bidders do not know they’re there, but they act in the same way as a vendor bidder would. They would receive some kind of kickback in return.

One 2oceansViber, with direct links to Levitt, claimed that this illegal ghost bidding was “common place,” and that it had been going on for years.

This is despite the industry employing tougher tactics to eradicate the behaviour like ensuring that every bidder is registered at an auction, and every other bidder being able to check this registration.

A man from Bloubergstrand told Die Burger last week that the same individual accused of illegally employing the tactic at an AA auction involving a wine estate last year (incidentally the auction that began the media firestorm), was caught on video at an AA auction in Plattekloof employing the very same tactic.

The Blouberg man’s lawyers say the ghost bidder was not registered, and after bidding to a certain level, he simply walked out of the auction.

The Star newspaper revealed that a member of Levitt’s legal advisers said that he is preparing to expose widespread corruption across the auctioneering industry soon.

It’s alleged he would want a pardon in return.

The so-called ghost bidder, Deon Leygonie, has already admitted Rael paid him to bid at the original wine estate auction:

Yes, Rael asked me to bid against that woman, Appelbaum. But I don’t know who I was bidding for. I’m not going to tell you how much they paid me.

Rael denied that Leygonie had been acting illegally, and that he was actually acting on behalf of businessman Ariel Gerbi.

The internal Auction Alliance investigation continues, as does the National Consumer Commission’s investigation into the original wine estate case.

[Sources: DieBurger, IOL, SummitListings]